|Magic of diversification|
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Definition of Magic of diversification
Magic of diversification
The effective reduction of risk (variance) of a portfolio, achieved without reduction
Dividing investment funds among a variety of securities with different risk, reward, and
The process of spreading a portfolio over many investments to
Strategy designed to reduce risk by spreading the portfolio across many investments.
Investing so that all your eggs are not in the same basket. By spreading your investments over different kinds of investments, you cushion your portfolio against sudden swings in any one area. Segregated equity funds have become a popular and secure way for average investors to get the benefits of greater diversification.
An investment technique intended to minimize risk by utilizing a wide variety of investments within a portfolio. In a diversified portfolio, a decline in the value of one investment, for example, should be offset by the strength of other investments.
The organizing principle of modern portfolio theory, which maintains that any riskaverse
The attempt to reduce risk by investing in the more than one nation. By
Investing in a variety of maturities to reduce the price risk to which holding long
A strategy that seeks to combine assets a portfolio with returns that are less than
A strategy whereby an investor simply invests in a number of different assets and
Highly diversified portfolios will have negligible unsystematic risk. In other
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